Car sales driver: It's NOT the economy!

Commentary by Coco Alcuaz, ANC

Posted at Aug 06 2014 07:01 PM | Updated as of Aug 07 2014 11:28 PM

MANILA, Philippines - If you thought economic growth is the big driver of car sales, think again.

Toyota Philippines broke the 10,000-car per month mark last month, helping produce a 43 percent increase in the first seven months. Last year, in the pre-Yolanda, pre-pork barrel controversy and pre-4.9 percent inflation economy, sales growth was just 15 percent.

The reason for the big jump is simple: people want new cars and this year Toyota has so far introduced three new models -- of the Altis, Yaris and Innova -- and one new car -- the Wigo. Last year there was just the Vios -- though that's Toyota's biggest seller here -- and the RAV4. The results are clear:

  2014   2013  
July 10,123 +64% 6,129 +15%
Jan - July 58,635 +43% 41,037 +15%
New models/cars Altis    Vios  
  Yaris    RAV4  

The term "planned obsolescence" gained popularity in the U.S. car industry almost 100 years ago, the idea that introducing new models will make car owners replace their vehicles even if they work fine. Just because they're "old style." It's what helped GM beat first-mover Ford, which produced the Model T with just incremental changes for almost 20 years.

Apparently it still works.

By the way, based on January-June data, Toyota sold about 45 percent of cars produced by Chamber of Automobile Manufacturers of the Philippines Inc. (CAMPI) and 38 percent of total vehicle sales when you add the Association of Vehicle Importers and Distributors (AVID).

Toyota 48,512
CAMPI 108,957
AVID 17,902

CAMPI and AVID don't see eye to eye, one of the reasons an auto industry roadmap is being held up.

Toyota has urged the government to hurry because it says the roadmap will help decide if it invests $300-M in parts manufacturing here, or elsewhere in Southeast Asia, creating employment which, unlike cars, never goes out of style.